BILL NUMBER: AB 858	CHAPTERED  07/10/00

	CHAPTER   106
	FILED WITH SECRETARY OF STATE   JULY 10, 1999
	APPROVED BY GOVERNOR   JULY 7, 2000
	PASSED THE SENATE   JUNE 22, 2000
	PASSED THE ASSEMBLY   JUNE 22, 2000
	AMENDED IN SENATE   JUNE 22, 2000
	AMENDED IN SENATE   JANUARY 24, 2000
	AMENDED IN SENATE   SEPTEMBER 10, 1999
	AMENDED IN SENATE   AUGUST 30, 1999
	AMENDED IN SENATE   AUGUST 17, 1999
	AMENDED IN SENATE   JULY 8, 1999
	AMENDED IN ASSEMBLY   JUNE 2, 1999
	AMENDED IN ASSEMBLY   MAY 27, 1999
	AMENDED IN ASSEMBLY   MAY 19, 1999
	AMENDED IN ASSEMBLY   MAY 6, 1999
	AMENDED IN ASSEMBLY   MAY 3, 1999

INTRODUCED BY   Assembly Member Kuehl

                        FEBRUARY 24, 1999

   An act to add Section 10754.2 to the Revenue and Taxation Code,
relating to taxation, making an appropriation therefor, to take
effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 858, Kuehl.  Vehicle license fee offsets.
   The Vehicle License Fee (VLF) law establishes, in lieu of any ad
valorem property tax upon vehicles, an annual license fee for any
vehicle subject to registration in this state in the amount of 2% of
the market value of that vehicle, as specified.  The VLF law
permanently offsets the amount of the vehicle license fee for each
subject vehicle by 25% and, for vehicle license fees with a final due
date in the 2000 calendar year, offsets the fee amount for each
subject vehicle by 35%.  The VLF law also provides, depending upon
factors that include whether forecasted General Fund revenues for
certain fiscal years are within certain revenue target ranges, for a
superseding offset percentage of 35%, 46.5%, 55%, or 67.5% to apply
to specified future calendar years.  The VLF law requires the
Department of Finance, in any of certain fiscal years for which that
department estimates a cumulative General Fund reduction of more than
$100,000,000 as a result of state tax law changes on or after
January 1, 1999, to apply that cumulative reduction, in accordance
with a specified formula, to proportionately reduce the percentage
amounts of superseding vehicle license fee offsets.  Existing law
also provides, as specified, for the reimbursement of cities,
counties, and cities and counties from the General Fund for revenue
losses resulting from vehicle license fee offsets.
   This bill would, for vehicle license fees with a final due date in
2001 or 2002, establish an additional offset that is equal to the
difference between an offset of 67.5% and the greater of a 35% offset
or the percentage offset applicable under current law.  This bill
would, in accordance with specified procedures, require the payment
of these additional offsets to taxpayers on a monthly basis.  This
bill would also establish a minimum vehicle license fee offset of 35%
for 2001 and 2002, and a vehicle license fee offset of 67.5% for the
2003 calendar year and each calendar year thereafter.  This bill
would also require that cities, counties, and cities and counties be
reimbursed from the General Fund for revenue losses resulting from
this additional vehicle license fee offset.  By requiring additional
moneys to be transferred from the General Fund for purposes of local
reimbursement, this bill would make an appropriation.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10754.2 is added to the Revenue and Taxation
Code, to read:
   10754.2.  Notwithstanding any other provision of law to the
contrary, all of the following apply:
   (a) (1) For each vehicle license fee for the initial or original
registration of any vehicle, never before registered in this state,
or for any renewal of registration, with a final due date in 2001 or
2002, for which the vehicle license fee offset required by Section
10754 is less than 671/2 percent, the Department of Motor Vehicles
shall concurrently calculate an offset, in addition to the offset
required by Section 10754, that is equal to the difference between
the following:
   (A) A vehicle license fee offset of 671/2 percent.
   (B) A vehicle license fee offset of the greater of 35 percent or
that percentage required by Section 10754.
   (2) The Department of Motor Vehicles shall, for each calendar
month, report to the Department of Finance and the Controller the
amount of each offset calculated pursuant to paragraph (1) for that
calendar month and the name and address of the taxpayer to whom that
additional offset applies.  The Controller shall, within 30 days
after receiving a monthly report from the Department of Motor
Vehicles, make payment of the reported additional offsets to the
identified taxpayers.
   (3) (A) For each vehicle license fee, for the initial or original
registration of any vehicle, never before registered in this state,
or for any renewal of registration, with a final due date in 2001 or
2002, there shall be a vehicle license fee offset of not less than 35
percent.
   (B) For each vehicle license fee, for the initial or original
registration of any vehicle, never before registered in this state,
or for any renewal of registration with a final due date in 2003 or
any calendar year thereafter, there shall be a 671/2 percent offset
that is administered as provided in Section 10754 as that section
read on January 1, 2000.
   (b) Revenue losses to cities, counties, and cities and counties
resulting from this section shall be reimbursed by the Controller
from the General Fund in the same manner as provided in Section
11000.  The amounts of General Fund transfers required by this
subdivision are deemed to be vehicle license fee proceeds and vehicle
license fee revenues for those same purposes as set forth in
subdivision (d) of Section 11000, are subject to the same pledges,
liens, encumbrances, and priorities as described in that subdivision.
